Recently Lord Agnew, the PUS for the School System wrote to firms that audit academies and their Trusts/Committees. Now a letter from a Minister carries with it both political and administrative weight when compared to one from a civil servant writing on behalf of their political masters. Lord Agnew’s letter can be found at https://www.gov.uk/government/publications/letter-from-lord-theodore-agnew-to-academy-trust-auditors
In the letter, , in the words of the DfE website, Lord Agnew ‘shares across the audit sector several key points that will help boards govern more effectively and make best use of the freedoms they have.’
So what are the key points in the letter? General Annual Grant (GAG) pooling is the first point specified.
Lord Agnew reminds the auditors that ‘The opportunity to pool GAG is particularly valuable, in particular to simplify the provision of support to weaker schools in a MAT until they can grow their pupil numbers. It is worth remembering that a MAT is a single financial entity.’
This isn’t a power generally available to local authorities in relation to maintained schools and typifies the different power arrangements between schools in MAT/MACs and those schools still in the maintained sector. Interestingly, he doesn’t ask the auditors for a time limit on taking money away from some schools to support others. Auditors might like to consider whether this cross-subsidy between schools should really be open-ended or in need for regular justification, since Regional School Commissioners seem to differ in their approach to such weak schools. Auditors can provide helpful national guidance by acting in concert on this point.
By the time Lord Agnew has reached Auditors’ management letters, he is telling audit firms that, ‘We would like to see the recommendations made by auditors being implemented in a timely manner with scrutiny at board level to ensure that this is the case.’ Now whether or not he sees it as a duty on the auditors to see that the contents of these letters are addressed is an interesting question. Of course, if the issue is really serious, then the auditors should quality the accounts. However, this is something auditors are generally reluctant to do, even though the DfE itself isn’t unfamiliar with the process in terms of its own accounts and their relationship with the academy sector.
Lord Agnew also hope his letter will open up debate between the auditors and their clients. His list of Operational Challenges is interesting. These include,
- Are your clients using a standard employment contract for all teaching staff so that they can be cross deployed to different schools?
- Are they using the same exam boards in all their schools to enable cross school marking and also to optimise the point above?
- Do they have a central electronic purchase order system to ensure strong controls on expenditure?
- Do they have a central bank account that simplifies bank reconciliations and ensures that there is constant, easy visibility of the cash position?
- Are they benchmarking their supply costs and if over a number of years the level is constant have they considered employing permanent staff to fill some of this requirement thereby improving the quality and removing agency charges?
- Are they accessing the Department’s procurement arrangements if they are providing better value than they can achieve on their own?
The first of these is highly interesting in the sense of moving back to controlling the lives of teachers. When I joined Haringey, in 1971, my contract specified a school but added that the council had the right to move me to another school. With all schools in the Authority in a tight geographical area this wouldn’t have had much to concern me, even if was in use, which by then it wasn’t. With MATs/MACs spread across large areas, it might be helpful to understand whether this policy, advocated by the DfE, is having any effects on recruitment and retention of teachers both at classroom level and, more specifically, in terms of promotion to middle leadership if it means a house move to a different area?
If these powers are to be enforced on academies, then presumably they are both important and useful for our school system. In that case, why aren’t local authorities allowed to create them for maintained schools and what is the future for stand-alone academies?
Perhaps Lord Agnew will write to Directors of Children’s Services explaining why these operational challenges don’t matter in the remaining maintained schools?